NEW E&C Report Examines the 340B Drug Pricing Program

WASHINGTON, DC – The House Energy and Commerce Committee, chaired by Rep. Greg Walden (R-OR), today released a new report detailing the 340B Drug Pricing Program, which was first established by Congress in 1992. The report entitled, “Review of the 340B Drug Pricing Program,” was released following the committee’s broad review of the 340B program.

The executive summary of the report highlights the strong bipartisan support of the program, but also explains some tremendous weaknesses of the program. Specifically, the report states, “Congress did not clearly identify the intent of the program and did not identify clear parameters, leaving the statute silent on many important program requirements. …HRSA [Health Resources and Services Administration] lacks sufficient regulatory authority to adequately oversee the program and clarify program requirements.”

The summary also states, “The committee has been examining the operation and oversight of the 340B program over the past two years. Through stakeholder meetings, hearings, and document requests, the committee has identified several weaknesses in program administration and oversight.”

Among the report’s findings are:

Congress did not clearly identify the intent of the program, nor its parameters.

HRSA lacks sufficient regulatory authority to adequately oversee the program and clarify requirements.

HRSA has started but still has not completed the process to issue and enforce regulations in the areas in which it has regulatory authority.

Although HRSA has increased the number of covered entity audits it conducts each year, the audit process still needs improvement.

The 340B statute does not require covered entities to report program savings or how they are used. As a result, there is a lack of reliable data on how program savings are used, and covered entities may use these savings in a variety of ways.

To help address these and other concerning findings, the report makes 12 recommendations, including:

HRSA should finalize and begin enforcing regulations in the three areas in which it currently has regulatory authority.

Congress should clarify the intent of the 340B program to ensure that HRSA administers and oversees the 340B program in a way that is consistent with that intent.

Congress, or HRSA where HRSA already has authority to make such changes, should promote transparency in the 340B program, including ensuring that covered entities and other relevant stakeholders have access to ceiling prices, and requiring covered entities to disclose information about annual 340B program savings and/or revenue.

Congress should establish a mechanism to monitor the level of charity care provided by covered entities.

“The 340B program has been incredibly important to communities across the country. After an extensive review of the program, including from the vantage points of those tasked with overseeing it and entities that participate in it, it is clear that it’s time for real reforms,” said Chairman Walden and #SubOversight Chairman Gregg Harper (R-MS). “We need to bring fresh accountability and transparency to this program to ensure patients are properly cared for and that this vital piece of our health care system is working as intended.”